The European arm of S&P, an American credit rating agency, fined €1.1 million by ESMA for multiple breaches.
It was fined a total of €1,110,000 by ESMA for breaching the Credit Rating Agencies Regulation. The penalty was split into three separate fines of €825,000, €210,000, and €75,000.
The agency has the option to appeal the decision to the Board of Appeal of the European Supervisory Authorities.
S&P Global Ratings is a division of S&P Global, a financial information and analytics company based in New York. It provides ratings for stocks, bonds, and commodities. It is one of the largest credit rating agencies in the world along with Moody’s Investors and Fitch Ratings.
According to ESMA, S&P had problems with how it managed its internal procedures and put them into practice. Between June 5, 2019, and September 8, 2021, S&P released the credit ratings of 6 companies before the actual securities were issued and announced to the public, which ESMA discovered during its investigation.
ESMA’s Chair, Verena Ross, said:
Publishing a credit rating before the issuance of the rated securities may result in harm to the issuer, to investors and more generally to the orderly functioning of the financial markets
ESMA said it discovered 6 times when S&P removed credit ratings from its public websites without warning from 2019 to 2021. And the S&P did not guarantee that the details supplied by one of its rated entities were correct and up-to-date for publication on the European Rating Platform.
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